Loyola University of Chicago School of Law, JD 2022
The Supreme Court began hearing oral arguments in the matter of National Collegiate Athletic Association v. Alston, et al. on March 31st, 2021. After decades of controversy regarding what restrictions the National Collegiate Athletic Association (NCAA) should be allowed to place on their member universities to compensate their collegiate athletes, many antitrust experts hope that the Supreme Court’s decision will give a final decision on if the NCAA’s current regulations are a violation of the Sherman Act and if they are, are they still justified by the NCAA’s goals.
National Collegiate Athletic Association v. Alston, et al.
In 2019, former West Virginia running back Shawne Alston along with other former student-athletes initiated a lawsuit against the NCAA alleging that it was violating federal antitrust law, specifically Section 2 of the Sherman Act by acting as a monopoly. The District Court when hearing the case ruled that the NCAA must allow schools to provide “academic materials, such as, computers and equipment needed for their studies that are not included in the cost of attendance calculation.” However, the District Court also held that the NCAA may still limit cash payments or “cash equivalent awards” to athletes. The Ninth Circuit affirmed this decision, stating that while there was an obvious antitrust issue, amateurism amongst student-athletes should be preserved and prioritized. Judge Smith, who served on the appellate panel, stated that the NCAA’s regulations were “the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services,” the exact harm that the Sherman Act is meant to protect against. The Supreme Court granted this case certiorari in December of 2020 and oral arguments are beginning this month to determine if the NCAA’s regulations are an antitrust violation that is unjustifiable.
The issue of collegiate play with professional consequences
One of the most polorizing issues in the sports world is the question of should collegiate athletes be able to profit off of their name and likeness. Currently, student-athletes are only permitted to profit off of their talent through reimbursed tuition, room and board, and necessities to complete their college degree that are currently capped at an amount set by the NCAA. Meanwhile, colleges make millions of dollars a year off of their 18-to-22-year-old students through selling t-shirts and jerseys with the players likeness attached to them. It is no secret that higher education is a billion-dollar business, however, collegiate sports, particularly men’s football and basketball, make competitive universities hundreds of millions of dollars each year. In 2015, the year that Ohio State won the College Football National Championship it’s athletic department reported $167.2 million of revenue. Subsequently, in 2016, Alabama- the College Football Playoff (CFP) National Champions, reported $148.9 million that year from athletic programming. While this revenue is attributed to a multitude of sources including tv deals and sponsorships through athletic branding companies such as Nike and Under Armor, these profits would not be possible without the athletes that attract the spectacle. Meanwhile, the athletes receive no compensation other than what the school chooses to give them for tuition, per NCAA regulations.
Is there a justification to a monopoly in the market of collegiate athletes?
The plaintiffs in this case allege that the restriction of pricing of an athlete creates a monopoly in violation of the Sherman Act. However, the NCAA’s argument is that by allowing student-athletes to be compensated for their performance at an uncapped rate, colleges would be willing and able to pay promising young athletes any dollar amount that their budget allows. For instance, a university could buy each recruit for their team brand new luxury vehicles if they write it off as a necessity for players to get to practice, if the current thresholds that universities are constrained to are uncapped. The NCAA also argues that if the current compensation cap was removed then collegiate athletes would lose the privilege of amateurism.
On the other hand, it must be noted that while the idea of amateurism is valued, in execution many high-performing athletes choose a path that allows them to profit from their performance by entering professional leagues at a young age. Many collegiate basketball teams that attract super-star athletes have become notorious in recent years for their players being “one-and-done,” meaning that after one year of NCAA eligibility they move on to professional leagues where they can make money for their effort- and not completing their undergraduate degree at the university that recruited them. This decision is warranted given the average career of a lifetime only extends until the time they are usually in their 30’s, except for extraordinary cases. The monopoly that the NCAA currently has in the market of collegiate athletics is what forces young athletes to make this decision and the justifications must outweigh the harm.
Takeaways so far from oral arguments
Many legal scholars following the case have noted that the justices seemed very critical of the NCAA’s arguments. Chief Justice Roberts immediately emphasized how the NCAA’s ‘glorification’ of the collegiate athletics model sounds like a “pay-for-play” system. All Justices, except Justice Breyer seemed to have similar musings but Justice Kagan seemed particularly chilled by the near omission that the NCAA is fixing prices in this particular market. The Court will most likely not release their opinions until this Summer, but many are speculating that by the tone of oral arguments the athletes are poised to win.